The Taskforce on Nature-related Financial Disclosures (TNFD) has released its long-anticipated beta version of its framework, which aims to guide corporate disclosure on nature-related risks and opportunities. On the surface, the framework is a great step in the right direction; however, when companies begin acting upon their nature targets, they will likely meet huge hurdles. When it comes to climate disclosure, we widely accept the measure as carbon emissions (tC02e), which, even if based on estimates, allows companies to share a common metric and use shared carbon-accounting rules. Biodiversity measurement, however, is not so simple. Data availability will be crucial in the success of the application of TNFD’s framework. So, for number-nerds out there, the thing to turn our attention towards is TNFD’s paper on data.
Companies will no doubt feel as though they are stuck between a rock and a hard place, as pressure mounts on them to disclose their nature impacts, but the lack of data is putting them at risk of inaccurate reporting. However, what should be comforting, is TNFD’s conspicuous awareness of the absence of centralised and decision-useful data; the paper acknowledges that information silos and dispersed data realms that do not easily interact, will hinder the ability of companies to engage with confidence. Ok… so what does this mean for companies right now?
In the short term, it seems that companies will have to make do with TNFD’s data platform mapping resource, despite TNFD’s huge caveats (“this mapping has been rapid and is not comprehensive […] TNFD does not endorse these data tools”). While TNFD’s list of over 35 tools is intimidating, to say the least, companies should begin to conduct assessments on the appropriateness of currently available tools, and adopt them where suitable. Crucially, however, companies must engage with TNFD. The beta version of the framework, including the data paper, is intended to catalyse open innovation, encouraging market participants to support the development of the framework through an iterative process (leading up to the final paper in Q3 2023). Tucked away toward the end of the paper, TNFD asks, “whether the TNFD should look to support the development of a decentralised but standardised nature-related data portal”. The answer that companies should be yelling back is “YES!” The secret to solving this problem is collaboration. Companies should embrace the opportunity to co-operate cross-sectorally, to ensure that their business needs are being heard and, ultimately, being met.